Good project management is an important factor to the success of a project. A project may be thought of as a collection of activities and tasks designed to achieve a specific goal of the organization, with specific performance or quality requirements while meeting any subject time and cost constraints. Project management refers to managing the activities that lead to the successful completion of a project. Project management focuses on finite deadlines and objectives. A number of tools may be used to assist with project management and assessment.
A fundamental scheduling technique used in project management is the Critical Path Method (CPM). With this model, the tasks that must be completed are determined and task data developed for each. The task data may include the start date, time required, sequencing requirements, finish date, cost effort, and resources. When all the tasks are determined, the path of tasks on the longest sequence for completion of the project becomes what is known as the "critical path" and the tasks on it "critical tasks." The sequencing of tasks in the project may be graphically presented in what is known as a PERT chart. The tasks and their duration may also be presented with a bar chart known as a Gantt chart.
A typical large project may be thought of as having four phases: (a) start up, (b) planning, (c) execution, and (d) close-down. During the planning phase, the numerous tasks that make up the project are determined and task data for each are determined. A baseline may be established when all of the project stakeholders concur on the appropriate plan. The baseline is the approved project plan (amount and timing) for a work assignment, output, set of outputs, or overall project. As used here, cost is an all-inclusive term that includes either dollars or effort hours. The baseline represents cost and effort expenditures with respect to time and activities. The resources necessary to complete project activities provide the basis for determining the cost and effort requirements. This determination is initially performed in the project planning stage and revisited whenever baseline revisions are deemed necessary.
The baseline is referenced throughout the project with the actual data. The actual data refers to the start and finish dates for tasks and actual costs, e.g., actual effort hours, applied or spent on a work assignment, output, set of outputs, or the overall project. At periodic time intervals during the project, the actuals and baseline are compared to determine a variance from the plan and also to forecast anticipated completion dates and costs for all remaining work. The forecast is the predicted cost, e.g., effort hours, to be spent to complete the remainder of a work assignment, output, set of outputs, or the overall project.
One of the more commonly used software packages for project schedule management is Microsoft.RTM. Project, which comes in numerous versions such as Microsoft.RTM. Project for Windows.RTM. 95. Microsoft.RTM. Project allows for task data such as duration, start date, finish date, and resources to be entered. As the project advances information on actual performance may be entered and information developed and presented concerning the performance of the project to date. See generally, Tim Pyron and Kathryne Valentine, Using Microsoft.RTM. Project for Windows.RTM. 95 (special ed. 1996). Microsoft Project.RTM. and other software systems for project management (collectively "project management software") do not, however, provide sufficient or readily-accessible earned value (EV) analysis information.
In managing a project, earned value (EV) analysis is applied to provide a more objective measurement of a project's cost and schedule performance than other project management methods. EV information facilitates analysis of the project's cost and schedule. For example, by comparing earned value with a baseline, the value of the work accomplished is compared to the value of the work planned. By comparing earned value and actuals, the value of work accomplished is compared to the value of the costs actually spent.